Labaton Sucharow LLP, a leading investor rights law firm, is seeking shareholders who purchased shares of PlayAGS, Inc. (“PlayAGS” or the “Company”) (NYSE: AGS), in the Company’s secondary offering on March 20, 2019 (the “March 2019 SPO”) at the offering price of $25.50.
PlayAGS, a Las Vegas, Nevada-based company, develops and manufactures products for the gaming industry, including electronic gaming machines (“EGMs”). PlayAGS focuses on supplying its EGMs to the Native American gaming market. The Company generates most of its revenues by leasing EGMs to casinos on Indian reservations in Nevada and Oklahoma.
In the materials PlayAGS used to conduct the March 2019 SPO and in its reporting with the SEC, PlayAGS repeatedly touted the Company’s purported competitive strengths and key growth strategies, including the optimization of the Company’s older, underperforming EGMs with newer, more profitable EGMs, as well as the replacement of new EGMs within its existing markets.
On August 7, 2019, when the Company reported its second quarter 2019 results, PlayAGS reported a loss per share of $0.21, versus expectations of earnings per share of $0.14. This loss included an impairment of goodwill of $3.5 million and an impairment of intangible assets of $1.3 million. The Company also reported disappointing quarterly revenues and adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”). Finally, PlayAGS lowered its full-year 2019 adjusted EBITDA guidance. PlayAGS attributed the weak results to product underperformance at three Oklahoma properties and problems with its placement of 800 incremental EGMs into the Oklahoma market over the past year, as well as the impairment charges.
On this news, PlayAGS stock dropped $8.99 per share, or 52 percent, to close at $8.31 per share on August 8, 2019, substantially below the offering price of the March 2019 SPO.
If you acquired PlayAGS shares in the March 2019 SPO for $25.50 per share, and wish to learn more or have any questions about this lawsuit, please contact David J. Schwartz using the toll free number (800) 321-0476 or via email at firstname.lastname@example.org.
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